Pretoria – Special teams from the Mpumalanga Provincial Treasury and the Office of the Premier will be sent to help three provincial departments to improve their financial management.
This follows a report presented by the Provincial Treasury on budgets and expenditure for all provincial departments, where finances in the Departments of Agriculture, Rural Development and Land Administration (DARDLA), Community Safety Security and Liaison (DCSSL) and Health were found to be in a bad state.
The Provincial Treasury had also recommended that the three departments be given special attention, and that a moratorium be declared at DARDLA, given that the department faced huge financial challenges caused by overspending, amongst others.
Provincial Treasury noted that the department filled posts without the necessary funding and was currently not in a position to even replace the current resignations. The department also regressed on the audit outcome from the Auditor-General.
In the current financial year, the department will not be able to meet its targets, while the budget will be spent in full.
On the other hand, DCSSL’s budget has already been depleted. The provincial treasury reported during a Lekgotla held on Monday that DCSSL had already presented a request for funding to the value of R275 million.
According to the Provincial Treasury, the department is expected to run out of cash in February and March in 2014 because of the security service that had created serious challenges for the management and administration of the department’s budget items.
“Over and above these challenges, payment for security service onwards might not be possible due to unavailability of the budget. Other challenges had been created by monthly payments of the usage of government vehicles, audit fees, communication items, operating leases, property and electricity payments.
“The situation might create challenges not only for the department but for the entire provincial government because most of the security officers will not get salaries in time. These problems would further affect the department in honouring its contractual obligations in paying the service providers within the 30-day period as per the requirement by the Public Finance Management Act,” Provincial Treasury reported.
The Department of Health was sent back to reprioritise its budget, as it had cash flow problems. The department’s accruals, which amounted to R247 million, would make it impossible to achieve their plans. The department had also budgeted R364 million for overtime.
The Lekgotla decided that the department should review its budget and use the money to pay for accruals.
Mpumalanga Premier David Mabuza has instructed that the three departments be given an intensified support.
Mabuza said the departments’ chief financial officers should explain themselves before the provincial budget and finance committee, as their monetary situations were out of hand.
“What happened in these departments was nothing but carelessness. The three chief financial officers must explain themselves, if need be, they must leave the departments. It cannot happen that the situation could be out of their hands … Prudent financial management must be implemented across all costs,” said Mabuza.
The intensified support by the teams will strengthen financial management directorates by monitoring the spending of these departments and provide spending plans.
Financial transactions will now be administered by the Provincial Treasury and would be assisted to reprioritise until they can function on their own. – SAnews.gov.za
